Most people have been buzzing about Jim Chanos this week because of his great call on Autonomy, an HP acquisition that will cost the hardware maker $8.8 billion.

But Chanos also spoke at London Ira Sohn Investment Idea Conference before that, and he gave a presentation on Brazil, called Brazil: “Brazil: Resource rich, not riches”, FT Alphaville reports.

The presentation focused on two companies he called his, "two favorite shorts," Vale and Petrobas.

Chanos is bearish on Petrobas because he believes that government management of the state oil company is suffocating its profitability. The company is drilling expensive oil fields, but at the same time, the government suppresses prices.

From FT Alphaville:

“People worried that Lula was a socialist, well, Dilma is a socialist,” he said. In short, his argument was that the government uses both of these companies to support their political aims, and that the private shareholders are never going to see the full profit potential of the companies. “A pure economic return will never be achieved,” he added, as the governments sees the companies as a key revenue stream for state coffers. He pointed to the recent changes to the tax code as evidence.

Vale, on the other hand, Chanos says is too reliant on Chinese iron ore.

The interesting thing about this, as Benzinga points out, is that Vale and Petrobas make up 26% of the iShares MSCI Brazil Index Fund (EWZ), an $8.8 billion ETF tracking Brazilian companies, is off 10% this year.

Earlier this year, Bridgewater's Ray Dalio announced a 2 million share stake in EWZ.